Unlimited vacation comes with pitfalls

by Contributor14 Nov 2016

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Unlimited vacation comes with pitfalls

Terry Hussey has never forgotten how Sunday nights used to feel: anxious dread, before another week at a job he hated.
So when he became CEO of Vigilant Management in Paradise, N.L., a company he co-founded in 2012 to oversee construction projects, he set out to nurture a particular kind of workplace culture.
Along with flex time and lunchtime video games, he instituted an eye-catching policy _ unlimited vacation.
``People might think: 'How can work get done here?''' he said, sitting in a boardroom with bright orange walls that match the chairs. ``But when it's time to get work done, work is getting done.''
Unlimited vacation policies were first made popular in the tech sector, where companies emphasize fun, creative work cultures as a recruiting and retainment tool. Although still very much the exception across North America, they're especially popular with workers for the implicit message they send: trust.
``I've found my dream job,'' Todd Tremblett, who has worked as a junior project manager at Vigilant for six months, said in an interview. ``You know the work that needs to be done and they trust you to do it. They don't micromanage.
``I'm used to having someone look over my shoulder.''
The idea is to give employees firm, clear goals, and judge only whether they're met. Such policies also have the substantial benefit to the company of removing any vacation liability from its books.
Experts say it doesn't lead to people taking substantially more vacation - in fact, it often leads to less. Which, everyone admits, is a problem.

``People don't just vacation whenever they want to. In fact, sometimes it almost does the opposite where people don't actually take vacation at all because now that it's unlimited, there's no requirement to take it,'' said Stacy Glass, a consultant with human resources firm HR Options in Markham, Ont.

``I've seen it go both ways.''

Glass says it is vital managers carefully track time off. Canadian laws vary among provinces, but include minimum vacation requirements - unlike the U.S. She advises employers to consider their company's culture and those legal obligations before trying such policies.

Mammoth HR of Portland, Ore., offered unlimited vacation as an experiment for a year starting July 1, 2014.

``People did all kinds of things,'' said Nathan Christensen, CEO of the human resources firm that employs about 55 staff. ``They climbed mountains ... they travelled abroad.''

Christensen said workers took an average of 26 paid days off, including sick time, compared to 25 days the year before.

Even though there was no significant jump, the policy became top-rated among workers along with health insurance and a retirement savings plan. Mammoth extended it indefinitely.

``What it said to employees was, 'You're in control of your lives. We respect you,'' Christensen said.

``We don't think it's right for every company. But for (those) for whom it can work, it can be a really powerful tool for employee production and retention.''

Leo Widrich, co-founder and chief operating officer of Buffer Inc., a San Francisco-based social media marketing provider, said nearby Silicon Valley is legendary for its workaholic tendencies and camaraderie. He went for three years without a vacation as the company took shape.

``To get something off the ground you have to dig in your heels and sleep under the desk,'' he said from New York City.

Widrich finally took a 10-day trip to Mexico in 2014 and came back convinced that rejuvenation is key to productivity, he said.
After that, the company offered its 35 workers unlimited vacation plus $1,000 bonuses to spur them out the door.

With 82 now on staff, the cash incentive was temporarily suspended this year due to cash flow issues, Widrich said. Still, workers are offered a suggested minimum of 15 vacation days plus most bank holidays.

``We want to see people getting renewal and avoiding burnout.''

Hussey said Vigilant employees, aged 20 to 66, take on average four weeks of paid vacation a year plus ``a slew of long weekends.'' He has never had people take too much time away, he added.

``I have had to strongly encourage some people to take time off, but they always listen and come back refreshed.

``An employee who likes what they do, they're happy and energized and they feel like they've got purpose,'' he said. ``They're less likely to be sick. They're going to have happier relationships with spouses, children, loved ones and friends.''

He said Vigilant has gone from three to 18 employees in three years, and he trusts them to know when they need a break and to ensure work is handled.

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